Insureon Blog

For Small Business, Sequestration Means Uncertainty

4. March 2013 16:12

Small-business owners buy liability insurance for two main reasons: to meet clients’ contractual obligations and to replace uncertainty with guaranteed financial coverage. One reason insurance is so important to the success of a small business is that uncertainty is, generally speaking, detrimental for a business’s bottom line.

This is because uncertain business owners tend not to make major investments – rather than taking steps to grow, they hunker down and prepare for the worst.

Sequestration Cuts That Will Affect Small Businesses

Because the sequester will impact all areas of government, the programs that support small businesses will not be spared. Specifically, planned cuts likely to affect smaller firms include…

In addition to these cuts, reductions for the aeronautics and space industry could mean that fewer large machines get built, which will likely have a trickle-down effect for small businesses, as many essential components and parts for large machinery are produced by small, specialized businesses.

Shielding Your Business from the Sequester

While the impending impact of the sequester is less than pleasant, there are steps small-business owners can take to shield themselves from some of the potential fallout.

  1. Review your client list. Losing an expected stream of revenue is never pleasant. Take time to review your clients and identify ways you can strengthen your relationships with them (e.g., a loyalty or bonus program). If any are thinking of ending their relationship with you, it will be harder to do when you make that relationship more valuable to them.
  2. Protect your income. Contact your insurance agent to see whether you can add Business Interruption Insurance to your General Liability policy, if you don’t already have it.
  3. Have a contingency plan. Whatever else you do, don’t stick your head in the sand and hope for the best. Review your revenue and expenses, and identify areas likely to be hurt by sequestration. If you do face revenue loss, it’s better to know as soon as possible so you can make a plan for managing.

Writtten by  - check her out at or Twitter

know your business risks


Small Business | Workers' Compensation Insurance

Permalink | Comments (0)

Pingbacks and trackbacks (1)+

Compare insurance quotes for your business
Save money by comparing insurance quotes from multiple carriers
Can't find your profession?